Wall Street is punctuating Disney with a big question mark.
Investors and Wall Street analysts both grappled with sudden uncertainty about the entertainment giant’s future leadership on Tuesday after Thomas Staggs, the company’s No. 2 executive and heir apparent to CEO Bob Iger, unexpectedly resigned a day earlier.
Analysts were torn between allaying client worries about the surprising twist and withholding speculation — but the slim details surrounding Staggs’ departure left them with little of substance to discuss.
Todd Juenger, an analyst with Bernstein, said in a note that he was “inundated” by questions from investors, but declined to address the most
“Iger is universally acknowledged as having provided exemplary leadership.
How do you follow an act like that? Who could possibly live up?” Juenger said. “If not Mr. Staggs, then who?
He noted that Staggs was well-liked by both investors and Disney’s rank and file, which “shows the enormity of this decision for the board” to broaden its search for candidates to succeed Iger when his contract — which he is not expected to renew — expires in 2018. Jeunger also said Disney indicated that its decision wasn’t linked to any issue related to the upcoming opening of the Shanghai Disney theme park.
Staggs had run Disney’s parks and resorts arm since 2010 before becoming its chief operating officer 14 months ago.
FBR analyst Barton Crockett said the “unexpected executive shuffle likely creates stress lines in the image of cool stability that has been the public veneer of Disney” under Iger.
But “what matters is the end result,” he said. “Disney and Iger have two years left to figure this out and get Disney a new leader who can carry on in the successful track (particularly in movies) laid down by Iger.”
While Crockett, like others, wasn’t certain what prevented Disney’s board from assuring Staggs of the job, he noted that Staggs “did not have the studio background some might think is important for the job.”
Stifel analyst Benjamin E. Mogil echoed the surprise with which the news was received. “While we do not change our rating following this announcement, we do view it as a negative,” he wrote.
BTIG analyst Rich Greenfield kept his commentary limited to tweets.
“Trouble I Feel”
Has to be “more” to this Tom Staggs abruptly leaving Disney than meets the eye #FadeTheForce $DIS pic.twitter.com/xW9MpLAB9k
— Rich Greenfield (@RichBTIG) April 4, 2016
Disney shares recently traded 1.8 percent lower at $96.95, after falling as much as 2.6 percent early in the day.